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Students Financially Worse off Than Ever

Wed, 20 Sep 2006
Students are facing a harder time now than ever before with their finances, experts have warned.

Callcredit, the credit reference agency calculates that students about to go to university this autumn are going to graduate with collective debts of £5 million, at an average of £15,000 each.

This is double the £6,161 average figure for graduating seven years ago.

To help students through their student years, with the least debt, Callcredit has produced a financial guide for fresh undergraduates.

Life is definitely financially harder for students than it has been. Decisions people are making about borrowing when studying is going to affecy their finances for many years. Therefore, it is important for them to have the information necessary to make decisions that are right for them.

Student loans still make up the majority of student debt. They have to be paid back when graduates commence earning more than £15,000. Payments are indeed capped at 9% earnings over this amount.

Students have even started declaring themselves bankrupt in order to clear these debts, with 899 students doing so in 2005 in contrast to 8 in 1992.

Bankruptcy affects a person's current and future assets. Home ownership can be ruined and even opening a bank account becomes difficult.

Below is a short student financial health guide:

A part-time job is very handy to supplement your income.

Should you need credit, utilise your student loan facility.

Ensure your bank account extends student benefits for long as possible upon graduation in order for overdrafts to be paid off.

Check your credit score. The better credit card is available to you, the higher your credit score.

Of course make sure you join the student union, and use the food, travel and shopping discounts.

Do not get taken in by store cards – they are usually much more expensive than credit cards .

If you enter a joint credit agreement with flatmates, to buy say a telly, you will become financially associated. Should they opt not to pay then you will be wholly liable for the debt.

Make sure that you take utility readings. and inform the suppliers each time you move. If you do not, you will be liable to pay for services not used by yourself.

Ensure that you can afford the credit commitments you get into. Should you not pay, you are likely to receive a county court judgement (CCJ) that affects your ability to get credit for as many as six years.